ASIC to clamp down on home loan exit fees

The Australian Securities and Investments Commission (ASIC) has been granted powers to crack down on home loan exit fees, it has been revealed.

Under new consumer protection laws which take effect from July 1st, ASIC will also be able to force banks and mortgage lenders repay thousands of dollars in previous fees, the Herald Sun reported.

The move will make mortgage switching easier, encouraging more property owners to compare home loans in search of more competitive rates.

Commenting on the legislation, treasurer Wayne Swan said: "We’re delivering the toughest laws seen in this area because we are determined to clamp down on any exit fees that rip people off, or keep them from walking away from any bank that tries to take them for a ride."

The news comes after Jeremy Grantham, co-founder of global investment management firm GMO, told the Australian this week that the country is in the midst of a housing bubble that may soon be impossible to sustain.

This article is brought to you by Mozo – Helping you compare home loans

Rate & Review

Mozo provides factual information in relation to financial products. While Mozo attempts to make a wide range of products and providers available via its site it may not cover all the options available to you. The information published on Mozo is general in nature only and does not consider your personal objectives, financial situation or particular needs and is not recommending any particular product to you. Mozo is paid by product issuers for clicks on, or applications for, products marked as "Promoted". If you decide to apply for a product you will be dealing directly with that provider and not with Mozo. Mozo recommends that you read the relevant PDS or offer documentation before taking up any financial product offer. For more information please see Mozo's FSG, General advice disclaimer or Terms of use.